When relationships end and couples go their separate ways, this can often lead to issues with the splitting of matrimonial assets. While the process of sharing assets is simple in theory, it can be quite complex in practice.
Now we will take a look at the various aspects to consider with regards to matrimonial assets, financial liabilities and the options open to each party.
The situation can become a little more complex when children are involved, which we will also address.
Continue reading to get all the details about what happens to your house if your split up.
What Are the Matrimonial Assets?
In simple terms, when a couple is married, then all of the assets brought into the marriage by one or both parties are deemed matrimonial assets. This means that each party has an equal share, and in the event of separation, all assets will be split down the middle.
This situation can become a little more complex with regards to property assets with the courts not obliged to split the assets 50/50 if there are extenuating circumstances.
Is My Wife Entitled to Half of a Property I Bought Before We Met?
Many people do not fully understand the term matrimonial assets which will include assets acquired, and paid for, by one party before marriage.
It is not a case of separating assets acquired pre-marriage and post-marriage; the assets of both parties are in effect amalgamated when they take their vows.
The situation is a little different with regards to cohabitation with a common misconception that after a predetermined amount of time living together each party reverts to “matrimonial rights”.
What if My Wife’s Name Is Not on the Property Deeds?
This is where the situation can get relatively complicated when only one party has their name on the property deed. Ultimately, legally the property is owned by that person named on the deed, but this is not the end of the story.
The law recognises the family home as a “special type of asset”, and therefore in the event of a separation, the other party can register their “marital right of occupation” over the family home.
Can I Be Forced to Put My Wife’s Name on the Property Deeds?
For a property which comes under the scope of marital assets, it doesn’t matter if your wife’s name is on the property deeds or not.
All assets are effectively owned 50/50, although how they may be split in the event of a separation is a different matter.
What Is the Marital Right of Occupation?
There are two sides to a marital right of occupation. On one side, this move will protect your wife’s right of occupation and means they cannot be forcibly removed.
From a financial point of view, this does not entitle them to a monetary share of the property but means that the property cannot be sold or remortgaged without their consent.
Unless an amicable agreement is reached, the courts will rule on a financial split between assets.
Maintaining a Family Home for Your Children
While many parties who have decided to separate will come to an amicable arrangement regarding their children’s accommodation, this is not always straightforward. In some circumstances, the family courts will become involved, and they can issue what is known as a Mesher order.
This gives one party the legal right to live in the property with the children for a predetermined time. The end of this arrangement could be triggered by the youngest child reaching 18 years of age or finishing secondary education.
At this point, the family home may be sold, and a potential financial settlement negotiated.
Protected Residency for a Prolonged Period
In a similar fashion to the Mesher order, the courts can also introduce what is called a Martin order. This is usually introduced where there is a significant disparity in income, and therefore one of the parties would struggle to maintain a similar standard of living.
The order would simply allow that individual to live in the property until they decide to move out, passed away or remarried. At that point, the property could be sold.
Maintaining Ownership With a Mesher/Martin Order
While a Mesher/Martin order is in place, the original deeds will remain untouched as will mortgage arrangements. For those who were married, this would effectively give both parties joint ownership and joint liability with regards to mortgage payments.
With a cohabitation arrangement, the situation is slightly different, and there is no obligation to place the other party’s name on the deeds/mortgage if they weren’t originally there.
Would My Ex-Wife Have Any Rights Over a New Property Purchase?
Assuming that you have come to an amicable arrangement covering the split of matrimonial assets, how you spend your money after the official separation date has no bearing on your previous partner.
However, if for example, the previous family home was involved in a Mesher or Martin order, then you would likely still have a mortgage ongoing. Whether you would be able to take out an additional mortgage to acquire a separate property would depend upon your income.
The affordability test for a new mortgage would also take into account the cost of the existing mortgage.
Do I Need to Inform My Mortgage Provider of My Separation?
Whether or not your ex-wife is on a joint mortgage or not, it would make sense to inform your mortgage provider of the significant change in your personal circumstances.
If the mortgage was provided on a joint income and your wife’s name was to be removed then you would need to undertake a new affordability test.
If it was your income alone supporting the mortgage, then it is unlikely a new affordability test would be required.
There is a common misconception that cohabitation over a prolonged period of time can morph into asset and income rights on a par with matrimonial assets.
Assets which come under the matrimonial umbrella would be split 50/50, but the situation will be very different for an unmarried couple cohabiting.
Each party would still have various rights and liabilities, but these may not be as clear cut from day one of the separation.
How Can The Mortgage Bank Help?
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Choosing an independent adviser means they won’t recommend a scheme unless they are sure it is in your best interests. Their advice is also regulated by the FCA, which gives you an additional layer of protection.
If you would like to speak to one of these brokers who can provide you with a ‘whole market quote’ then click on the below and answer the very simple questions.